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Chile's central bank cuts rate to 1.75%

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Chile's central bank cuts rate to 1.75%

Members of Banco Central de Chile's monetary policy committee unanimously agreed to cut the benchmark interest rate by 25 basis points to 1.75% from 2.00%, the institution said in an Oct. 23 press release.

The monetary authority argued that current inflation readings close to 2% called for additional monetary stimulus for it to converge toward the 3% goal on a two-year horizon.

Additionally, the bank said that the recent protests across the country will have effects on the Chilean economy, with activity being restrained over the short term by "partial paralysis" and "damage to the infrastructure."

Over the medium term, the bank said that harm to the economy would depend on "the magnitude and speed of the reconstruction, impact on expectations and the effects of measures announced by the government."